Medicare counts its cost of capital at $0, while all private companies have to include their borrowing costs in their balance sheets. Medicare also has almost no enrollment or collection costs, since Social Security takes care of the enrollment, and the IRS takes care of paying into the plan. And insurance companies pay taxes (often part of that expense ratio) while Medicare IS a tax. If you took the free rent, shared phone bills, shared payroll and benefit costs and other goodies conveniently left out of Medicare's budget, expenses would be still be advantageous for Medicare, but a lot closer.

And, insurance company expense ratios are flexible, with large plans covering thousands of employees having a low ratio comparable to Medicare while smaller plans will be more expensive. Smaller plans not only have more enrollment expense, they often have to pay commissions to agents or brokers who set them up.

While much is made of insurance companies denying coverage, not much is made of them being much better at catching fraud than Medicare is. They also usually don't have the absurdly complex different parts of coverage that Medicare has. Some parts which, of course, contract with insurance companies.

So, what we're back to is not putting all the blame on the big bad insurance companies, but dealing with a system that manages to come up with million dollar cancer treatments and $10,000 days in the hospital.

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